Construction Test 1 - Lecture 4 Flashcards
What are the key lesson objectives in construction contract and law?
Fundamentals of construction law, elements of a contract, conflict resolution methods, surety bonds and their types.
What is the definition of a contract in construction?
An agreement that affects the legal relationship between two or more persons.
What is the purpose of contract documents?
Describe design, construction conditions, and provide bidding instructions.
What is the primary purpose of construction contracts?
to organize and document decisions, not to
Name different types of construction contracts.
Design, construction maintenance, design-build, bond, insurance, BOT (Build-Operate-Transfer), equipment leasing.
List the steps in a typical contracting process.
Design complete
Pre-qualify constructors
Advertise and request bids
Receive and open bids
Select lowest bid and submit bonds
Award contract
Preconstruction conference
Notice to proceed
Monitor construction
Closeout and final payment
What are the key construction contract documents?
General conditions, supplementary conditions, technical specifications, drawings, and addenda.
Name documents created during construction
Submittals, RFIs, NCNs, as-built drawings, O&M manuals, progress schedules.
What happens if a contractor makes a mathematical mistake in a bid?
Owners may allow bid withdrawal, but credibility may be affected.
When can a contractor withdraw a bid?
If a mistake is proven and a written notice is given.
Why might an owner reject bids?
Too few bids, over budget, irregularities, qualifications, or obvious errors.
What is a bid substitution?
A suggested change to the base bid by the bidding firm.
What is a bid alternate?
A bid option requested by the owner to compare different products or methods.
What are the key elements of a contract?
Offer and acceptance, consideration, meeting of the minds, lawful subject matter, and competent parties.
What is the Mirror Image Rule?
Acceptance must exactly match the offer for a valid contract.
What happens if a contractor refuses a shipment that exceeded the ordered amount?
The contractor may be liable for damages if the original contract was breached.
Can a contractor refuse to pay extra if a subcontractor was already required to finish work?
Yes, as there was no new consideration for a new contract.
Can a supplier refuse to deliver materials due to a 25% price increase?
Likely no, unless it meets legal standards for “commercial impracticability.”
Can a contractor be forced to pay for land lease if the project site turns out to be a burial ground?
No, due to the doctrine of “impossibility of performance.”
What is the purpose of surety bonds?
To assure project owners that contractors will fulfill their obligations and pay suppliers.
What are the parties involved in a surety bond?
Principal (contractor), obligee (owner), surety (bonding company).
What factors determine if a contractor qualifies for a surety bond?
Experience, workload, project nature, type of owner, bid results, contract terms
Name the three main types of surety bonds
Bid bond, performance bond, payment bond.
What does a bid bond guarantee?
That the contractor will sign the contract if awarded; otherwise, the surety pays damages.
